The Australian residential market could be on the road to recovery with pre-conditions now existing for the market to grow, according to CBRE.
The Australian Residential MarketView report for the December 2012 quarter shows an improvement in sales volumes but suggests previous significant growth cycles are unlikely to be seen in the immediate future.Click to enlarge
“A low interest rate environment, modest improvement in building approvals, an increase in population growth, improving rental yields, expanding buyer enquiry levels, sales volumes improving and recent equity market growth are all necessary for a market geared towards recovery,” says CBRE’s regional director of residential valuations Tom Edwards.
Edwards says households will remain focused on debt reduction rather than expanding property holdings, which will deliver a stronger capital growth.
Melbourne remains the star performer in terms of auctions, with a surge in auction listings and a strong clearance rate of 70% over late February.
The clearance rate during the same period in 2012 was around 50%.
However, the report says a recovery in price growth is not evident as buyers remain well informed about realizing pricing levels and are cautious about taking on high levels of debt.